Formation of Roadside Real Estate Joint Venture

Barkby Group PLC
31 October 2023




Barkby Group PLC


("Barkby" or the "Company")



Formation of Roadside Real Estate Joint Venture


Corporate update



Barkby, (AIM: BARK) the Roadside Real Estate business, is pleased to announce the formation of a joint venture with Meadow Partners LLP ("Meadow"), to acquire and develop a portfolio of UK-based Roadside Real Estate assets, (the "JV").




·      Joint venture aiming to create a substantial portfolio of modern Roadside Real Estate assets, to be funded by up to £100 million of equity with an intention to add appropriate levels of leverage

·      The JV is targeting a double-digit portfolio internal rate of return ("IRR") over the 30 month initial investment period

·      Meadow will initially own and fund 97% of the JV while Barkby will own and fund 3%

·      Barkby has the option to increase its ownership percentage in the JV up to a maximum aggregate holding of 10% within the first 12 months following the JV's establishment (the "Additional Investment Option")

·      Barkby will receive a share of surplus capital as a performance fee dependent on an IRR hurdle

·      In line with good corporate governance practices the Company is progressing the appointment of a Non-Executive Chair, at which point Charles Dickson will become Chief Executive

·      Barkby intends to change its name to 'Roadside Real Estate plc' to reflect its strategy, alongside a proposed share consolidation

·      Stifel Nicolaus Europe Limited ("Stifel") appointed financial adviser and joint corporate broker



Charles Dickson, Executive Chairman, said:


"We are delighted to be working with Meadow to implement a fully funded strategy to institutionalise a new asset class within the real estate sector. Roadside Real Estate will offer exciting potential for investors and we believe this JV has the opportunity to create a portfolio worth £250 million over time.


"Having successfully developed a small number of roadside sites which have proven our concept, we will seek to rapidly convert our acquisition pipeline to create value for shareholders and our joint venture partner, whilst delivering valuable community amenities - not least increased access to electric vehicle charging."



The Joint Venture


The Company has explored a variety of options to fund its strategy amidst a challenging capital markets environment. The Board has concluded that the JV offers the best structure to support the successful implementation of its strategy, maximising the creation of sustainable shareholder value. The formation of the JV creates a well-capitalised vehicle capable of rapidly deploying investment in target assets.


Meadow is a real estate private equity manager based in New York and London with US$6.2 billion gross AUM. Meadow specialises in middle-market real estate transactions across all sub-sectors and risk profiles. Its partners have been responsible for the acquisition and ongoing asset management of over US$30 billion of real estate assets located in the United States, Europe and Asia. Meadow is now investing Fund VI.


The JV will focus on acquiring sites where it can offer consumers a mix of Drive Thru, Foodvenience, Local Logistics and Trade Counter businesses alongside opportunities to increase EV charging facilities.


Over the 30 month investment period, the JV intends to create a modern roadside portfolio worth over £250 million1 through acquisition, asset management and development, including opportunities across the portfolio for electric vehicle charging infrastructure.


Pipeline and Barkby's current portfolio

The JV has a prospective Roadside Real Estate investment pipeline in excess of £150 million as more stock comes to the market and additional approaches are being made to the Company by vendors. Tenant demand for these sites is strong, attracting high-quality nationwide operators, underpinning reliable, long term income streams.


The pipeline includes a site in Stoke which is currently owned by Meadow, which the JV may consider as an initial JV acquisition, however it is still subject to due diligence and negotiation by the Development & Asset Manager (as defined below).


As announced in the trading update of 29 September 2023, Barkby's existing wholly-owned portfolio of Roadside assets comprises two schemes which the JV may consider as investments:

·      Wellingborough, which achieved practical completion in May 2023 and is fully let, providing a contracted rent of £232,300 per annum across a total rentable space of 14,100 sq.ft. Occupiers include Greggs, Formula One Autocentres, City Plumbing Supplies and Brewers Decorator Centre

·      Maldon is expected to reach practical completion imminently and has a contracted rent of £280,000 per annum, 78% of which is index-linked with caps and collars, across a total rentable space of 14,200 sq.ft.


Principal terms of the JV

Initially, Meadow will own and fund 97% of the JV while Barkby will own and fund 3%. Barkby may exercise the Additional Investment Option within the first 12 months following the JV's establishment, to increase its aggregate ownership percentage to up to a maximum of 10%. The exercise of the Additional Investment Option is at Barkby's sole discretion, including as to if the Additional Investment Option were to be taken up in full, in part or not at all.


The JV, which will have an initial investment period of 30 months, will be able to request up to £100 million of equity funding from Barkby and Meadow to facilitate the purchase of assets within the scope of its business. Acquisitions will be funded pro rata to the parties' shareholdings and, accordingly, Barkby's initial maximum aggregate capital commitment will be £3 million, absent Barkby electing to increase its stake in the JV to up to 10% via the Additional Investment Option. A funding obligation on the JV's shareholders will only be crystalised when an asset or development site fitting the JV's investment criteria is identified by the Development & Asset Manager, commercial negotiations are completed and the investment is approved by the JV's board. If a party fails to provide requested funding and the other party does not elect to satisfy the shortfall, this will constitute an event of default. In the case of an event of default, the defaulting party may be required to transfer its shares in the JV at an independently determined fair value.


The Board stresses that, due to the time intensive nature of the Roadside Real Estate developments which the JV will be investing in, the full £100 million equity commitment will in practice only be capable of being drawn down by the JV over the 30-month investment period and not within the first 12 months (being the term that the Additional Investment Option can be exercised). Therefore, the Additional Investment Option exercise is highly unlikely to result in the maximum £10 million equity commitment being provided by Barkby over this 12 month period.


The JV, registered as Roadside Retail Limited (Jersey incorporated), will be subject to investment accounting treatment by Barkby and will therefore not be consolidated into Barkby's financial statements.


Meadow will be entitled to appoint two directors of the JV and Barkby will be entitled to appoint one director. Certain limited decisions in connection with the JV will require the consent of both parties.


The JV is targeting a double-digit portfolio IRR for the investment period. Surplus proceeds from the realisation of the JV's portfolio, after an initial rate of return hurdle for Meadow, will be distributed to Barkby and Meadow. Barkby may also receive an additional share of surplus proceeds as a performance fee, dependent on aggregate returns to the parties.


As part of the JV, Barkby has established a subsidiary vehicle, Roadside Asset Management Limited (UK incorporated), that will provide development and asset management services, (the "Development & Asset Manager") of which Barkby will own 51%, with Meadow owning 49%. The JV will pay the Development & Asset Manager an annual fee based on Gross Asset Value under management and development management fees on the hard construction costs of those assets being developed.


Barkby and Meadow will each be entitled to appoint two directors of the Development & Asset Manager, and there are certain reserved matters in relation to the operation of the Development & Asset Manager which require the approval of both parties. The shareholders' agreement for the Development & Asset Manager contains compulsory provisions in the case of a deadlock and events of default, as well as "drag and tag" provisions consistent with the JV shareholders' agreement.


During the initial investment period, Barkby and the Development & Asset Manager will offer all future Roadside Real Estate projects to the JV. If the JV elects not to pursue a project, Barkby will be permitted to pursue it independently provided that the Development & Asset Manager is appointed as the asset manager and development manager in connection with such project.


There can be no guarantees that the JV will ever drawdown the full £100 million of equity available to it under the JV agreement and therefore there can be no guarantees that Barkby will ever be required to fund the maximum £10 million equity commitment to the JV even if the full 10% Additional Investment Option were to be taken up.


Exit provisions

There is not a pre-agreed exit mechanism for the JV's shareholders in normal circumstances. However, the JV agreement does include certain compulsory transfer provisions in circumstances qualifying as an event of default. As described above if a party fails to fund their pro rata proportion of a drawdown request by the JV up to the maximum agreed aggregate quantum, and the other party does not elect to satisfy the shortfall, this will constitute an event of default. In the case of an event of default, the defaulting party may be required to transfer its shares in the JV at an independently determined fair value. Additional scenarios qualifying as an event of default include:

·      an insolvency event of Barkby or its associates;

·      material breach by Barkby and its associates of the JV agreement, the asset management agreement and any development management agreement entered into with the Development & Asset Manager;

·      a party committing a fraudulent act or being guilty of misappropriation of funds; and

·      a party breaching anti-corruption undertakings in the JV agreement.


An event of default occurring does not automatically terminate the JV agreement or give rise to a termination right. However, the non-defaulting party could effect a compulsory transfer of all of the defaulting party's JV holding to itself or to a third-party.


The JV agreement also contains standard "drag and tag" provisions.



Board changes


The Company is in negotiations with a potential Non-Executive Chair whose expertise and experience would make them a valuable addition to the Board. Further announcements will be made as appropriate.  Upon the appointment of a Chair, Charles Dickson will become Chief Executive.


Furthermore, following appointment of a new Chair, the Board intends to refresh its composition with the aim of increasing its diversity to reflect, in so far as is possible, a broader range of backgrounds and expertise.



Proposed change of name, disposals and share consolidation


Change of name and listing identifier

As a result of the formation of the JV and the Company's new operational focus, the Company intends to change its name to 'Roadside Real Estate plc'. Accordingly, the Company intends to change its listing identifier from 'BARK' to 'ROAD.' For the change of name to take effect, shareholders will be asked to pass a special resolution at a General Meeting of the Company. The change of listing identifier is contingent on shareholder approval for the change of name.



As noted in the Company's recent trading update:

·      Workshop Coffee was sold to its management team on 31 July 2023

·      Centurian Automotive wound-down trading activity from the start of the 2023 calendar year

·      The Board is exploring options in relation to divesting Barkby Pubs


Cambridge Sleep Sciences, ("CSS") has made significant progress on its Software-as-a-Service license-based business model and agreed several global licensing deals. CSS continues to seek new licensee opportunities and is in advanced negotiations with a leading global hotel group, a sports watch designer and a leading home entertainment equipment manufacturer.


Castle Corporate Finance continues to undertake a strategic review of the business with the aim of evaluating the most appropriate corporate setting and structure for the company. The Board currently believes that the best interests of Barkby's shareholders will be served by either a third-party sale or demerger. There can be no certainty that any offer or sale will ultimately be made for CSS or as to the value of any such proposed deal.


Share consolidation

The Board is also proposing a share consolidation, to reduce the volatility associated with price movements in the Company's shares.


A circular will be sent to shareholders in due course providing further information on matters requiring shareholder approval.



Appointment of Financial Adviser and Joint Corporate Broker


Stifel acted as financial adviser to Barkby in connection with the formation of the JV. Barkby is pleased to announce the appointment of Stifel as financial adviser and joint corporate broker, with immediate effect.


- Ends -





Barkby Group PLC

Charles Dickson, Executive Chairman

c/o Montfort





Olly Scott

Georgia Colkin



+44 (0)78 1234 5205

+44 (0)75 4284 6844

Cavendish Capital Markets Limited (Nomad and Broker)

Carl Holmes / Simon Hicks / Fergus Sullivan (Corporate Finance)

Tim Redfern (ECM)


+44 (0)20 7220 0500




Stifel Nicolaus Europe Limited (Financial Adviser and Joint Corporate Broker)

Mark Young

Jonathan Wilkes-Green

Catriona Neville

+44 (0)20 7710 7600



1.   Portfolio value comprised of the JV's equity investment in addition to the Board's reasonable expectations around portfolio value accretion and leverage.



About Barkby

Barkby is a roadside real estate business focused on building and scaling a high-quality portfolio of modern assets.


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact or visit

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.
UK 100

Latest directors dealings